Before acquiring a system for a particular application, one often desires to first determine which implementation of the system is “best” over the system's anticipated life cycle. One often uses cost to determine which system implementation is best. For example, one may compute the costs for a number of system implementations and then select the implementation having the lowest cost. To conduct such a cost comparison, one should first determine the parameters of each system implementation, such as the initial acquisition, operation and support (O/S), and refresh parameters. Then, for each system implementation, one can compute the implementation's total cost as the sum of the costs of these parameters.
For example, assume that the United States Navy (USN) wishes to outfit a submarine with the least expensive implementation of an electronic warfare (EW) system that is anticipated to last for twenty years before needing replacement. The total cost of this system includes the initial-acquisition cost, the operation and support (O/S) cost, and the refresh cost. The initial-acquisition cost is the cost of acquiring the initial system. For example, the USN may acquire an EW system by designing the system, purchasing the parts, assembling the system, and installing the assembled system on a submarine. Or, the USN may acquire the EW system by purchasing it, and perhaps the installation, from a supplier. The O/S cost is the cost of repairing and otherwise maintaining the system in working order. And the refresh cost is the cost of periodically upgrading, i.e., refreshing, the system. An example of refreshing the system is replacing a processor with a next-generation processor that has increased functional capacity (e.g., faster clock speed, larger bus size) relative to the replaced processor. Consequently, the USN may wish to estimate and compare these costs for a number of competing implementations of the EW system and use this comparison as a criterion for choosing an implementation of the system.
Two parameters that distinguish one system implementation from another are the system configuration and the system refresh strategy. Typically, the system configuration is defined by the parts that the configuration includes (i.e., at least some parts of one configuration are typically different from the parts of another configuration), and the refresh strategy is defined by the refresh rate and the parts to be refreshed. For example, the USN can typically refresh a submarine system only when the submarine is in port, and a submarine is typically in port at predetermined intervals. Consequently, the USN may wish to compare the costs for different configurations of an EW system at a given refresh rate to determine the most cost-effective configuration for a given port interval. Or, the USN may wish to compare the costs for a configuration of the EW system at different refresh rates to determine the most cost-effective port interval for a given configuration. In addition, the USN may wish to compare costs for refreshing a part versus replacing the part. For example, the USN may wish to compare the cost of a particular EW system configuration where a sonar subsystem is periodically refreshed to the cost of the same configuration where the sonar subsystem is periodically replaced.
Unfortunately, as discussed below, although cost-estimation tools are available for allowing one to compare the cost of one system implementation to another, these cost-estimation tools often cannot determine or otherwise provide the refresh-dependent parameters of the system. That is, these tools cannot provide a refresh strategy that will yield the estimated cost.
FIG. 1 is a block diagram of a conventional system 10, which is formed from a number of subsystems 12 and components 14. Specifically, the components 14a compose the subsystems 12, the components 14b compose the system 10 directly, and the subsystems 12 and the components 14a and 14b are collectively referred to as the system parts 16. For example, if the system 10 is an EW system for a submarine (not shown), then the subsystems 12 may include, e.g., an infrared torpedo guidance system, a sonar system, and one or more displays and the components 14a and 14b may include, e.g., microprocessors, memories, transistors, resistors, and capacitors. Typically, the system designer purchases the subsystems 12 as complete units and installs them in the system 10, although the designer may design and assemble some or all of the subsystems.
FIG. 2 is a price curve 20 that plots the purchase price of a part 16 (FIG. 1) vs. time over the part's life cycle. The life cycle of a part 16 is typically divided into the following five periods: introduction, growth, maturity, decline, and obsolete. It is during the introduction period that the part 16 first becomes commercially available and is typically at its highest price. During the growth period, which is effectively a continuation of the introduction period, the manufacturing volume continues to increase and the price continues to decrease. During the maturity period, the manufacturing volume levels off at a maximum level and the price levels off at a minimum level. During the decline period, the manufacturing volume begins to decline and the price begins to increase due to lower demand, which is typically due to the anticipated release of a next generation of the part 16. And during the obsolete period, which is at the end of the part's life cycle, the manufacturing volume falls toward zero and the price increases sharply for the last available parts. Typically, the obsolete period coincides with the introduction, growth, or maturity period of the next generation of the part 16. For example, such a price curve applies to microprocessors such as the Pentium® series from Intel®. When the Pentium® III was first introduced, it had a relatively high price, but this price decreased over time. Now, with the introduction of the Pentium® IV and subsequent-generation processors, Intel® is manufacturing fewer Pentium III® processors, and this will eventually cause a corresponding increase in price.
Referring to FIGS. 1 and 2, some conventional cost-estimation tools estimate only an initial-acquisition cost of a system 10. Typically, a cost-estimation tool is implemented in software, and one provides the tool with the identity, quantity, and price of a currently available generation of each part 16 that composes the system 10. This data is typically called the bill of materials (BOM). If one intends to purchase a subsystem 12 instead of designing and assembling the subsystem, then he typically enters this data for the subsystem as a whole, and does not enter this data for each component 14a that composes the subsystem. That is, the subsystem 12 is represented by a single entry in the BOM. From the quantity and price data, the system generates a total price for purchasing the parts 16. Then, using one of a number of conventional algorithms, the tool calculates the initial-acquisition cost of the system 10 as a function of the total purchase price for the parts 16. This initial-cost algorithm accounts for the costs incurred in acquiring the system 10 other than the purchase price of the parts 16. Such costs include the costs for designing, assembling, and testing the system 10. Furthermore, this algorithm typically has been developed empirically based on the initial acquisition costs of existing systems, and is typically specific to the type or technology of the system 10. For example, an initial-cost algorithm for an EW system is typically different than an algorithm for a financial-accounting computer system.
Unfortunately, such cost-estimation tools cannot provide a refresh strategy of a system 10 because refresh occurs after the initial acquisition of the system.
Still referring to FIGS. 1 and 2, other conventional cost-estimation tools can estimate post-acquisition costs for a system 10 that is implemented with a replacement strategy. According to one technique, a cost-estimation tool assumes that enough spare parts 16 are purchased when the system 10 is acquired to keep the system operational for its anticipated life cycle. Therefore, in addition to entering the BOM as discussed above, one enters for each part 16 in the BOM, from which the tool calculates a respective price curve for the currently available generation of each part, and a minimum time before failure (MTBF). Such historical data typically includes the price over time for the currently available generation of each part 16, as well as the prices over time and the life cycles of prior generations of each part. Then, from this data, the tool determines how many spares of each part 16 are needed to maintain the system 10 in working order for its entire anticipated life cycle, and the best time to buy these spares, which is typically the period of lowest price, i.e., the maturity period. For example, suppose that the anticipated life cycle of the system 10 is twenty years starting from the present, the system includes ten processors that each have an MTBF of five years, and the currently available generation of these processors will be in the maturity period of its price curve for the next two years. Therefore, the tool determines that a minimum of thirty spare processors are needed to last the twenty-year life of the system 10, and calculates the total cost of the system by assuming that one will purchase forty processors (ten initial, thirty spares) during the next two years. Then, using a conventional algorithm, the tool estimates the cost of the system 10 over its life cycle as a function of the prices of the initial parts 16 and the required spares.
Unfortunately, as discussed above, although such a cost-estimation tool may provide an accurate cost estimate for a system 10, it does not provide a refresh strategy for achieving the system.
A system administrator often prefers a refresh strategy over a replacement strategy. That is, an administrator often prefers to refresh a currently installed part 16 with an available next generation of the part instead of merely replacing the parts with the same generation, which may no longer be available at the time of the refresh. For example, assume that the system 10 has an anticipated life cycle of twenty years and includes a processor that has a MTBF of five years, and that a subsequent generation of the processor comes along about every five years. An administrator may prefer to refresh the processor every five years with an available next-generation processor instead of purchasing three spare processors at the beginning of the system's life. Reasons for this preference include a desire to spread the price of purchasing new parts 16 over the life of the system 10 instead of buying spares up front, to avoid the cost for storing the spares, and to take advantage of increases in the functional capacities of and other improvements in subsequent generations of the parts. Consequently, a tool that estimates post-acquisition costs of the system 10 based on buying spare parts 16 up front (replacement strategy) does not determine, and thus does not provide, a refresh strategy for achieving the system. Therefore, if the system administrator chooses to achieve the system 10 using a refresh strategy, he must determine the refresh strategy with no help from the tool.
Therefore, a need has arisen for a tool such as a cost-estimation tool that determines and provides a refresh strategy for achieving a selected system.